by Dave Warner
Saturday night the 17th, Copper Moose posted on Facebook that it would be their last night of operation until things went back to normal. Eric Lewis, owner of the restaurant said, “To all of our loyal customers, I’m saddened to say that tonight is our last night of operation until the COVID-19 restrictions are lifted. A neighborhood pub like ours can’t survive as a business with five tables in the dining room (versus the normal twelve) and no bar business. We hope to open back up again once all restrictions are lifted and we can get back to full capacity.”
People read the post and lamented about the loss of the restaurant and whether they would come back or not, but the story is so much deeper than that. Seven months into this pandemic, the restaurant industry is facing a $240 billion dollar loss according to the National Restaurant Association. Employment in the industry remains 2.3 million jobs below February’s pre-coronavirus peak, and 32 states have experienced a net decline in restaurant jobs. It is estimated that about 100,000 restaurants have either permanently closed or are closed for the long term, but the true number won’t be known until government statistics are released in the months ahead.
Lewis said that when the restrictions were first announced, it was something that he had to think about every single day. “How long is this COVID-19 restriction going to last? In early March with the four-phase plan, we thought we’d be open at the end of June or early July. The problem is, we never got into phase four. We’re stuck in this phase three social distancing max capacity scenario.”
Because of the dimensions inside of the restaurant, they could only have five tables for customers. “In April, May, and June, we thought there was some daylight, but as the summer wore on and the PPP money ran out, it looked like there was no end in sight, and in fact, that things might backslide,” he stated.
He said that he just didn’t see where things were going to get better and that they just couldn’t continue to lose money every single week. So, he made the decision to close, and they tried to negotiate with suppliers, insurance companies, and others to get things put on pause.
Some companies understood while others were not so friendly
“Things like trash and laundry service, and even insurance, so that the little money we have could keep us going until we could reopen.” Lewis said that most companies understood the situation, but that others were not so friendly.
Just in the insurance area, they had coverage on the building, a business owner’s policy, and a liquor liability policy. “Since we’re shut down, we wanted to pare the insurance down to just cover the building because there’s no operating business and we’re not selling any liquor. That seems like it’s going to go well,” stated Lewis.
Another company though, basically told him tough luck, because the contract was written under Florida law and it automatically renewed, and that he was now liable for the full value of the contract until it comes up again in July of 2021. Lewis said to them, “so this is how you treat a good paying customer of six years and you’re saying there is nothing you can do?”
Lewis said that they also have to have a functioning bar that is full of people. “For any local pub to make it, the margins on the food that you sell are super thin. Once you take into account all the things that go into making it, it’s a ‘break-even or make a little bit of money’ option at best.”
The real profit is on the beer and liquor sales, and for years, that was 35-40% of the business. “Once the COVID restrictions kicked in, our beverage sales were less than 10% of our total sales. You just can’t make it on that,” he said.
Lewis said that even if they had the room to add additional tables, that the beverage sales at those tables would more than likely not make up for the bar sales. Besides, when October hit, nobody would be dining outside anyway, and that was not a long-term option.
He said, “It’s not just Copper Moose, but any smaller neighborhood pub, or bar type of place with a good atmosphere that you can go to. I just don’t know how any place like that is going to be able to stay open.”
Hindsight being 20/20, he said “Had I wished I’d bought a place that was bigger? Sure, but at the same time, I’m glad I didn’t because, for the last six and one-half years, it’s been the perfect sized place. It’s the perfect atmosphere, it’s right on Main Street, it’s an anchor business that draws people to Little Falls, and it’s the epitome of what a small Main Street business is.”
Lewis said that people just loved the fact that you could walk down to Copper Moose, have a great meal and a drink.
How many places are thinking of closing permanently?
Over the next few months, Lewis wonders how many of the small restaurants and local places in the area that are like his are going to do. “How many are going to be able to be closed that long and then have the money to make a food and beverage order to reopen,” he stated. “How many places are thinking of closing temporarily or permanently?”
He says that a recent survey showed that almost 70% of all the restaurants that are left may not make it until the end of the year. “That’s huge. When you think about the millions of people that are employed by these small restaurants and the industry, and not just them, but all the others that have been built up around the industry supporting these places, they’re all throwing their hands up right now as well,” he said.
Read Part II coming on Friday morning, October 30th.